Posted by: madkentdragon | July 30, 2013

The Bedroom Tax, Unforseen Costs?


Just a thought about the so-called “Bedroom tax” – call it what you will, it is a reduction in housing benefit that is paid to social housing tenants who qualify with help for their rent.

Before I go any further, I must admit that I do not live in social housing and do claim some help towards my rent and have only ever received a percentage of the benefit available as I live alone in a small two bedroomed, privately rented house, so I have always paid “The Bedroom Tax” and I am also retired.

The government say that all those in the larger properties can swap with those who are living in the overcrowded smaller properties which would work for some – but there’s one big problem with this.

There are very few smaller properties available, many were sold off in the selling frenzies of the seventies and eighties and of these a large percentage have been bought from the original purchasers by landlords, who intend to make a profit from every house that they own.

So, eventually when all those who aren’t getting the full rent get evicted because they have not been able to pay the “top up”, where will they go?

At this point, some of the new buy-to-let landlords will be rubbing their hands with glee, because that’s where these unfortunate people will end up. A nice little earner as Mr & Mrs Smith/Jones and their one or two offspring move in to the more expensive but smaller house.

Private landlords charge a lot more rent than social housing – a two-bed house where I live can be anything up to eight hundred pounds per calendar month whereas a social housing residence is not much more than four hundred and fifty pounds a month – do you see the problem?

So the Smiths/Jones move in to a private rental property – and joy of joys, they now qualify for the full cost of the housing, so now the local council/government pay up to eight hundred pounds a month for them to live in the correctly sized house which is near the children’s schools and Mr Smith/Jones part time job which is all he could find and it costs an extra three hundred and fifty pounds a month more – so who is the winner?

I have a solution – if instead of putting money out there for banks to lend (ha ha) to first time purchasers who may or may not be able to extract it from the banks – lend it to housing associations to build properties that are needed in the area – cheaper rent, banks not holding on to the money and less hassle all the way round with tenants more willing to move to secure suitable housing.

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Responses

  1. Good points as usual, Pat.

    In Wakefield it’s noticeable that three small communities of bungalows have been removed (two have been demolished already, the third is making way for an Aldi). In both the public and private sector round here you’re heading towards flats as the only option – and these aren’t always an option for the people told to downsize (the disabled, for example).

    The scenario you’ve described above is one that hasn’t occurred to the government simply because they’re slashing costs ideologically. If they utilised some common sense they’d see that if they encouraged councils and housing associations to build more one-bed properties now then implement the bedroom tax in a few years it might be more logical. But, of course, ministers lose their common sense when they’re appointed.


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